INTERNATIONAL COMMERCIAL ARBITRATION

PROBLEM QUESTION Mylder, a German company, entered into a five-year licence deal with Syave, a Brazilian company, in relation to a software product called ‘Tymblr’. The parties orally agreed at a meeting in New York that the contract would be on Mylder’s standard terms of contract. Those terms included an arbitration clause, specifying ICC arbitration in Geneva. After a few months, Syave claimed that Mylder had seriously misrepresented some features of Tymblr, with the result that the profits to be made out of the licence were much lower than it had anticipated. It gave notice that it was avoiding 1 the contract and ceased to pay the licence fee. Mylder referred the dispute to arbitration. Syave participated in the arbitration but consistently maintained that it was not bound by the arbitration clause on the grounds that (i) the agreement between Mylder and Syave was not ‘in writing’ as required by the New York Convention 1958, and (ii) the contract containing the clause had anyway been avoided. The ICC established a tribunal with three arbitrators, appointing Professor Wanda Ring as chair. The tribunal issued an award in favour of Mylder, in the amount of $ 5 million. The tribunal specifically addressed the question of its competence, and concluded that there was a valid and binding arbitration agreement. Mylder is now seeking to enforce the award in England, where it has obtained a freezing order to prevent the dissipation of Syave's assets. Syave has meanwhile been doing some investigation of Professor Ring and has discovered that her brother-in- law is a partner in the law firm representing Mylder. Advise Syave as to the further defensive steps it might take in this dispute.